Best Practice Guidance: Investment Recovery. Investment Recovery Association Conference March 7, 2016

Transcription

1 Best Practice Guidance: Investment Recovery Investment Recovery Association Conference March 7, 2016

2 Professional Education Clarification

3 Alliance: Our Members Our Members Our Vision To be known as the leader in developing voluntary standards for a robust and sustainable electric utility industry supply chain including advancing the maturity level of utilities and stakeholders. Develop voluntary standards Share Best Practices Scope of influence includes non-fuel spend, Utility Supply Chain Operations

4 Supply Chain Model Material Planning Major Projects SC Strategy Procurement Investment Recovery Logistics Inventory Mgt. Back Office Warehousing 3

5 Investment Recovery Sustainability: Today s topics 1. Background and approach 2. IR sustainable best practices 3. Questions 4

6 Background & Approach Committed to create 3 Best Practice documents by 2018 Investment Recovery was identified as the priority IR team selected by Alliance Utilities Conducted baseline interviews with participating utilities Conducted an Investment Recovery Association Speed Dating exercise Consolidated more than 100 IR concepts into six main categories Discussed best practices for specific commodities Organized concepts by greatest sustainability impact for least effort and expense Conducted legal and peer reviews 5

7 Investment Recovery Team Members Ameren - Todd Richter, Aitor Barrio, Jackie Johnson Duke - Russ Wilkenloh (Chair) DTE - Venus Randle, Michelle Eldridge Eversource - Joy Woolley, Jennifer Hart Exelon - Eric Vincent, John Gallaher, Jacob Kmetz, Thomas Hennessy, Bill Gallagher OGE - Sherryl Love, Chris Dickson Western Equipment Dealers Association - Julie Niemann, Jane Male 6

8 Primary Function of Investment Recovery: sell or repurpose materials and equipment Reuse or repurpose of materials and equipment is the highest level of sustainability avoid introduction into the waste stream. 7

9 IR materials and equipment 60% - 75% of Investment Recovery revenues and recycled volumes are scrap commodities managed through vendors Scrap Metals Scrap Wire & Cable Scrap Transformers Used Transformer Oil Used Fleet & Lube Oil Meters Plastics Treated Wood Untreated Wood Electronics Lighting, Light Bulbs Batteries 8

10 Scrap Metal, Wire, and Cable 9

11 Scrap Transformers 10

12 Used Transformer Oil 11

13 Used Motor & Lube Oils 12

14 Scrap Plastics 13

15 Scrap Wood 14

16 Scrap Electronics, Meters, Lighting 15

17 Summary of Best Practices for Investment Recovery for Utilities 1. Incorporate desirable sustainability practices in the Investment Recovery Bid Process 2. Measure waste reduction and recycling improvement 3. Align IR with other Supply Chain functions to improve performance and reduce waste 4. Align IR function with organizations outside of the Supply Chain and/or Company 5. Consider alternative disposal practices 6. Summarize IR Best Practices for specific commodities 16

18 1. Incorporate desirable sustainability practices in the Investment Recovery Bid Process a) Sustainability Components included in the competitive bidding process (High Impact, Medium Effort) b) Assess sustainability impacts related to processing Recycling Commodity By-Products (Medium Impact, Low effort) c) Assess sustainability impacts related to processing commodities for sale and recycling - Processing location/domestic or other (Medium Impact, Low Effort) d) Use of diverse vendors (Tier I and Tier II) to manage IR commodities. (Medium Impact, Low Effort) e) Include the governance functions of the environmental group and legal group for developing waste and recycling contracts, performing environmental audits (Medium Impact, Medium Effort) 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 17

19 2. Measure waste reduction and recycling improvement Report all weight and revenue to corporate sustainability team as part of tracking purposes for corporate reporting. (Medium Impact, Medium Effort) Start by understanding total waste: Total Landfill (weight) + Total Recycling (weight) = Total Waste Stream (weight) Then calculate diversion rate: Total Recycling / Total Waste Stream = Total Recycling % (or diversion rate) 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 18

20 3. Align IR with other Supply Chain functions to improve performance and reduce waste a) Engage vendors about buyback options for used/new products; right-sizing of packaging, logistical improvements b) Better Material Planning to reduce excess c) Facilitate the reuse/redeployment of materials internally within the company, or externally with other utilities (materials returned, sharing between warehouses, business units, other utilities) 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 19

21 4. Align IR function with organizations outside of Supply Chain and/or Company a) Improve sustainability performance by engaging and educating employees on IR for waste reduction and recycling improvement (High Impact, Medium Effort) b) Build a network with other utilities through UPMG, USMA, Rapid, Investment Recovery Association and other alliances (Medium Impact, Medium/High Effort) 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 20

22 5. Consider alternative disposal practices Establish unique partnerships with community groups to facilitate under utilized labor resources/create jobs e.g., Goodwill Industries (High Impact, Medium Effort) 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 21

23 6. Summarize Best Practices 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 22

24 6. Summarize Best Practices Major Commodities: Metal/Cable Meters Transformers Transformer Oil Lighting Light Bulbs Lead Acid Batteries Electronics Wood Used Oil Plastics/HGDP 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 23

25 6. Summarize Best Practices Types of Practices: Certifications Processing of waste Closed-loop Recycling Single-source processing Peripheral recycling Sustainability alignment with vendor Vendor community involvement/ vendor diversity Specific commodity processes 1.Incorporate. 2.Measure. 3.Align w/supply Chain. 4.Align w/org. 5.Consider. 6.Summarize 24

26 8 Best Practices for Specific Commodities 1. Certifications: Industry-specific certifications relative to desirable recycling and waste management practices o R2/RIOS Certification o E-Stewards Standards 2.0 o ISO 9000 o ISO o OHSAS18000 o Green Supplier Network 2. Processing of Waste Internal & External By-product Recycling: Management of waste by-products that are peripheral to the primary category of the recycled commodity o Approval of waste & disposal vendors o Approve Owners/Operators of landfills o Approve Oil-recycling process o Monitor & approve of waste generated vs. shipments of commodities o Defined parameters/target levels to reduce waste 25

27 8 Best Practices for Specific Commodities 3. Closed Loop Processing: o Documentation of downstream vendors Downstream vendors are documented by the vendor and approved by the utility to recycle the material for the utility. Ability for the utility to approved the processors of the material and approve the consumer outlets for the material 4. Single Source Processing: Combining different but related commodities together in a single collection point for recycling by a vendor o Allow combining multiple commodity variations in a single collection point to reduce utility effort and promote recycling. o Examples: - Wooden reels, pallets, crates, scrap lumber - ferrous metals, non-ferrous metals 5. Peripheral Recycling: Allow combining of peripheral materials with the primary commodity at the generating location to promote recycling, reduce waste and improve the logistics of transporting material to be recycled o Example: cable, ceramics, conduit 26

28 8 Best Practices for Specific Commodities 6. Sustainability Alignment with Vendor: Sustainability culture and practices of the vendor are aligned with the sustainability culture and practices of the utility o Sustainable practices related to air, water, waste, energy, waste management, recycling improvement 7. Vendor Community Involvement / Vendor Diversity: o Recycling vendor is engaged and supportive of the utility s community in which they operate. o Recycling vendors are evaluated similarly as diverse suppliers, second-tier subcontractors 8. Specific Commodity Processes: Support of best practices related to specific waste stream commodities o Practices identified by various vendors utilized by alliance members o Transformer oil o Transformer recycling practices o Light bulbs o Wood 27

29 Wrapping up and Next Steps Six major IR sustainability themes: 1. Incorporate desirable sustainability practices in the Investment Recovery Bid Process 2. Measure waste reduction and recycling improvement 3. Align IR with other Supply Chain functions to improve performance and reduce waste 4. Align IR function with organizations outside of the Supply Chain and/or Company 5. Consider alternative disposal practices 6. Summarize IR Best Practices for specific commodities Utilities should review current state and perform a gap analysis EUISSCA Investment Recovery Sustainability Guidance is a living document 28

30 Investment Recovery Sustainable Best Practices document is available on the Alliance website under the Resource section: Contact information is required to access the document; but once entered, all Alliance best practice documents are made available. Questions? 29

31 Thank You!